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The Takeover Panel always has a long list of areas on which to keep a watching brief in the UK merger and acquisition market, but recent events are set to push the tricky issue of what constitutes a concert party up the agenda.

The issue of concert parties has come to the fore again this week with news that two Russian billionaires are set to take a 38% stake in London-listed Polyus Gold.

The Takeover Panel is set to look into whether Zelimkhan Mutsoyev and Gavril Yushvayev are buying the $4bn stake together as a so-called “concert party”. If they are, they would be forced to make a mandatory offer under the Takeover Code.

The reports bring the issue of concert parties back into focus. Last month, the Takeover Panel demanded that the Indonesian shareholders in Nat Rothschild’s London-listed resources firm Bumi Plc should reduce their shareholdings to below 30% because they had fallen foul of concert party rules.

The latest case could force the Takeover Panel to renew its focus on concert parties, lawyers say.
One partner at a US law firm said: "It is quite foreseeable that the code will look again at the rulings around concert parties, given the amount of attention that the topic has been garnering."

On the face of it, the rules surrounding concert parties are relatively straightforward. Under rule 9.1 of the code, any person who acquires an interest in shares which, taken together with shares in which persons acting in concert with him, carry more than 30% of the voting rights has to make a general offer for the company.

But the connections between concert parties are becoming harder to ascertain as more emerging market companies list in London, and as the UK market becomes more international.

One head of UK M&A at a US bank said: "We have a market where increasingly, quite a few foreign companies are coming in looking for the premium listings, where they are relatively large businesses in the context of the FTSE 100.